USD/JPY Surges, U.S. Employment Data Far Exceeds Expectations【February 5, 2024】
February 05, 2024
- U.S. employment data far exceeded expectations, causing the Dollar Index to surge.
- Expectations for U.S. interest rate cuts have been pushed back, and the market remains optimistic even in a high interest rate environment.
- High interest rates are expected to continue, with USD/JPY aiming for the late 148 JPY range.
USDJPY Technical Analysis
Analyzing the daily chart of USD/JPY, it surged to the mid-148 JPY range following the strong U.S. employment data results. The Dollar Index’s sharp rise indicates a continuing trend of dollar strength.
Given the U.S. economy’s robustness in a high interest rate environment, the dollar has become more attractive, suggesting an upward trend for USD/JPY. Specifically, surpassing the recent high of 148.80 JPY could trigger an uptrend according to Dow Theory. Breaking through 148.80 JPY could lead to a surge towards the 150 JPY range, incorporating stop losses.
For dollar straight currency pairs, including USD/JPY, the approach should be with a bias towards buying dollars.
Day Trading Strategy (1-Hour Chart)
Analyzing the 1-hour chart of USD/JPY, it has rebounded from the Ichimoku cloud’s conversion line, indicating a strong upward signal. Considering the continuing dollar strength trend, entering a buy position for USD/JPY is advisable.
Surpassing the high of 148.80 JPY seems only a matter of time, and doing so could rapidly drive the pair towards the 150 JPY range, taking stop losses into account. However, with the RSI reaching 70, a rapid decline could follow a sharp increase. Therefore, it’s advisable to avoid excessive chase buying.
The day trading policy is market buy orders. For long-term trades, aim to settle at 150.50 JPY, and for short-term trades, at 149.60 JPY. If it falls below 147.5 JPY, a strategy revision is necessary.
Support and Resistance Lines
Upcoming significant support and resistance lines:
148.80 JPY – Recent high
USDJPY Sell: 75% Buy: 25%
Today’s important economic indicators
|Economic indicators and events
|U.S. ISM Non-Manufacturing Employment Index
|FOMC Member Comments
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.